Thursday update

SHORT TERM: pullback continues, DOW -119

Overnight Asian markets gained 0.1%. Europe opened higher but lost 0.1%. US index futures were higher overnight, and at 8:30 weekly Jobless claims were reported lower: 255k v 281k. The market opened two points above yesterday’s SPX 2114 close, dipped to 2111 by 10am, then tried to rally. At 10am Leading indicators were reported higher: +0.6% v +0.7%. By 10:30 the market hit its high of the day at SPX 2117. Then it started to decline. Around 11:30 it broke through support at SPX 2110, and declined to the next support at 2102 by 12:30. Then after a bounce to SPX 2108 by 2pm it headed lower again. In the last hour of trading the SPX hit 2099, then bounced to close at 2102.

For the day the SPX/DOW were -0.60%, and the NDX/NAZ were -0.40%. Bonds gained 11 ticks, Crude lost 60 cents, Gold slipped $5, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: New home sales at 10am.

The market opened slightly higher today, pulled back, then hit SPX 2117. After that there was a steady decline to SPX 2102, before a bounce, and then an even lower low. We had counted three waves up from the downtrend low at SPX 2045: 2074-2051-2133. And was expecting this pullback to be the fourth wave before heading higher. Over the last two days the SPX hit 2110, the first support, then 2102, the second support, and now made an even lower low. This is more than was expected for a fourth wave pullback. With the DOW leading the market lower, one has to consider that this uptrend may just be more corrective activity in the multi-month corrective activity see have observed all year. In order for the impulse wave to remain intact the market needs to find some good support soon, and then rally a higher high. Short term support is now at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Short term momentum continues to display a positive divergence during the decline. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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170 Responses to Thursday update

  1. GYN LAB says:

    I see some posts saying 2085 is .618 retrace.. but isn’t .618 of 2045-2133 at 2079? right in the range for a possible Minor 2 low. INDU at .886 and RUT almost retracing completely so if it doesn’t turn back up here then RUT impulsive count goes out the window and becomes a problem.

  2. European indices still a fly in the ointment for the bearish case. Daffy DAX has given back only 44% whilst the CAC an even more miserly 25% using the latest AH data.

  3. On the way up the ascent looked like a 3. Now today’s action looks like a 3 in the opposite direction. Market suffering from multiple personality disorder. Prognosis uncertain. Small bounce here is probably just a little 4 meaning larger 3 likely still in play.

  4. torehund says:

    breathe deeply, what is the gull attempting to tell us.

  5. was that a .618 retrace and no up. Or more down Monday?

  6. john b says:

    touched a bit of support at 2077 ,will see how long it holds…but im in the ongoing correction camp now

  7. 2085 pivot and 61.8% fib are gone. 11 consecutive bars tagging the lower BB on the hourly chart.

  8. thoth8 says:

    NASDAQ next support is 4464.58

  9. jwmcbride says:

    had appointment with my kidney Dr glad I got stopped out

  10. zepfan123 says:

    Transports falling back near the 8000 level. it will be a big negative for the ENTIRE market if they fall much below that. Trannies ALWAYS a big picture leading indicator. Next weeks action is going to be a thriller I suspect. And who would have thought the COMP would be 75 pts off it’s earlier high this morning with that huge rally in all the tech NASDAQ stocks like AMZN. Veddy interesting.

  11. Peter Sliney says:

    This market has been sideways for a long time. A pent up directionless market may have just found the path of least resistance. We could be unwinding for a while.

  12. First sign of life in gold/GDX….

  13. stephenk1980 says:

    Now I’m a P4 believer, I think this is wave 3 of the first big wave down. Shorting the rally that should happen soon is going to be key. Riding the 3rd wave down from that rally is going to be the money maker IMO as I would expect us to break the years lows quite easily into the mid 1900’s. At this point the masses will start to be believers too so we’ll have the big B wave up before the final leg down to close.

    All from my crystal ball, of course😉

    nb. Anything written above is subject to change at any minute and I do not accept any liabilities for being totally and utterly wrong.

  14. Page says:

    SPX 2040-2050 is given now.
    At this point looks like Monday will be another down day then Tuesday off to the races for ATH.

  15. kvilia says:

    The game is pretty simple – watch for RUT to close inside BB. Although perhpas a little premature but I will be most likely buying at the close.

    • frommi2 says:

      Its really funny how everybody is bullish, despite the fact that the major bullish count is already busted. We had an EDT in RUT and SPY. That means the uptrend has gone to far and a correction comes. At the same time TLT and GOLD are looking bullish.
      The probabilities for short are at least 60/40 at the moment.

      • kvilia says:

        Looking for a bounce, frommi. The type and size of it will navigate us further, stops are prudent to have. That’s all, no weather forecasts here.

  16. H D says:

    1 of C down anybody? Was there news?

    • H D says:

      2 things that should help the VIX guys. VIX made lower low last week and SPX did not HH. Who leads who? and the VIX rose greater percent 2:1 than UVXY, that product is broken.

      • I noted that below in my comment last night. Expect a higher S&P high in 3 or 4 weeks based on the patterns the past 18 months or so.

        Fully expect lower S&P lower low next week, and again the week after, but from there a ramp to ATH (as long as going over 2133 how do we not?).

        • H D says:

          Thx FO, I really like your posts, I missed it earlier, these hits always feel like the bear has started and then it rallies so micro/tactical till 2044 or 2138 goes.

          • Thanks HD. I feel like I owe a bunch of people like Tony and others thanks and any useful input I can provide, given how much I’ve been helped over the years. That said, I’ve never, ever done as well in the market as I did once I started doing a few studies like I discuss. None of em are secret or anything, and the patterns change over time. But I figure if computers have to be programmed to look for things, than they are only as imaginative as their programmers. So I am trying to figure out what an unimaginative programmer might program a computer to do, like ramp up into expiration and down out of, key off of extremes around Bradley dates, and so on.

      • uncle10 says:

        UVXY. only wall street would design something like that. I have told newbie and anyone else who reads this blog that it is designed to go down. It doesn’t follow the vix or the market. It buys vix futures when they are high and sells them when they are low–over and over……its headed to 0 with a few spikes in between.

    • gtoptions says:

      55 back @ 2078

  17. Where newbie He should be jumping up and down, No bounce at 2080 is not going to be good

  18. frommi2 says:

    EDT in gold nearly finished now up to 1380$?

  19. manunidhi21 says:

    Namaste Tony!

    Things are not looking good on charts..same vicious cycle of a range..
    I am planning to switch to P3 completed as ED count is still valid.
    Sometimes market checks your patience or gives you hints. Whats ur opinion ?

  20. lunker1 says:

    if 2110 was A and 2118.5 was B then C=A=2085.7 (ish)

  21. i have rarely been net short since spring of 2009.

  22. mid-day market update for friday,
    fairly sized downswing is likely within the next days to weeks, i am net short :
    see bottom of blog’s comment section

    • kvilia says:

      The bounce is coming, really it all depends whether it’s just a bounce or a strong move to the ATH. A little too earrly to call the big move?

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